Quantcast
Jump to content

Setting goals

mmotley
 Share

Recommended Posts

mmotley Proficient

mmotley

Posted
Posted

I am in the process of starting to track important figures or 'key performance indicators'. Since I am a small growing shop, one of the easiest things to track is simply Gross Sales. I have been rewarding my employees (3) with going out to dinner at a restaurant of their choice any time we have a record month. My first question is, does anyone see a problem with this reward?

 

My second question is, how do you go about setting goals for KPIs? I know there will be different methods when comparing individual tech efficiency goals to gross sales goals, but how do you handle each one. How about shop productivity? Do you simply use industry bench marks or base your goals off your personal history?

mspecperformance Mentor

mspecperformance

Posted
Posted

Joe, would you have any recommendations for a shop management course for shop owners. Most I see are 1 day workshops designed to get you to sign up for coaching which I don't think a lot of business are willing to do or can afford. WorldPac was putting on some nice classes for service advisors that touched some of those subjects. I rather liked the WP classes since there is not pitch for more sales.

mmotley Proficient

mmotley

Posted
  • Author
Posted

Joe, would you have any recommendations for a shop management course for shop owners. Most I see are 1 day workshops designed to get you to sign up for coaching which I don't think a lot of business are willing to do or can afford. WorldPac was putting on some nice classes for service advisors that touched some of those subjects. I rather liked the WP classes since there is not pitch for more sales.

I was wondering the same thing. I'm not sure I need or can afford the 1 on 1 training/coaching that some of these companies want to offer. I started another thread asking about RLO training. I'm also curious about WorldPac, AMI, Elite, and a few others. Any input would be appreciated.

mspecperformance Mentor

mspecperformance

Posted
Posted

I was wondering the same thing. I'm not sure I need or can afford the 1 on 1 training/coaching that some of these companies want to offer. I started another thread asking about RLO training. I'm also curious about WorldPac, AMI, Elite, and a few others. Any input would be appreciated.

 

I can only comment on WP training. I ran through their Service Advisor Class years ago and it was great. It gave me a lot of insight on something I had no idea about. Even a seasoned service advisor/owner can get a lot of out refreshing on the material. IMO one of the best parts is the whole workshop/class is not meant to be a giant sales pitch on further services. I would love to go to some of their other offers however none ever seem to be in my area.

flacvabeach Community Regular

flacvabeach

Posted
Posted

I wouldn't put too much stock in gross sales. ARO and margins tell you more about how your business is performing. If your advisor's incentives are based solely on sales, you have to watch that they aren't discounting to make sales. A few years back, we saw our sales numbers increasing, but our margins stunk, so we started working on margins and ARO and sales actually dropped, but we ended up taking more home. Once we felt we had a handle on the fundamentals we started pushing car count.

  • Like 1
  • 1 year later...
totalautocare Enthusiast

totalautocare

Posted
Posted

I really have no clue what KPI's to chase. Absolutely clueless however, this is what I've done shooting from the hip and so far it's been working.

 

MARGINS

  • Advisor get's paid on part margins, inspections and diagnostic sales.
    • The retail price is pre-established by a 52% margin from napa prolink's pricing to us (they're the highest priced aftermarket vendor in our area).
    • We then call the other local vendors to ask them for there best price on product X and shop around amongst local vendors to beat it and we get dramatic price drops from online (sometimes finding the products for an additional 20-30% cheaper) so if the advisor takes the extra time to source it, he can dramatically increase his pay without becoming out of this world overpriced.

We've been doing this for the past 3 yrs and haven't burned any relationships as that's the first question I'm asked after I'm told that takes way to much time (do the #'s, 20-30% is huge).

  • Technicians get paid on hours (If the variance goes outside 10% of our estimating guide, we want to know why).

I don't know what else to really do.

CSI SCORE

  • Not really even a legitimate one, if the client is ecstatic with our service, we ask them to get online and write a review on FB and Google. 4.8 avg minimum or I get ornery.
  • Afraid of it becoming a leveraging system of clients over staff. Don't know how others have successfully approached that.

 

ARO

  • Without a minimum requirement or a push, we've always approached it with this mentality: Would you rather see 30 cars to make $3,000 or would you rather see 3? Which one would be less frustrating?

CAR COUNT

  • I've been afraid to chase this one as the immediate thought goes to "couponing" or something. Does anyone have any suggestions for this?

 

That probably sums up my KPI's because that's all I know. Any suggestions? (Please refrain from insults and negative insinuations, I'm being transparent hoping that I'm asking questions others have but are afraid to ask for fear of looking silly.)

mspecperformance Mentor

mspecperformance

Posted
Posted

I really have no clue what KPI's to chase. Absolutely clueless however, this is what I've done shooting from the hip and so far it's been working.

 

MARGINS

  • Advisor get's paid on part margins, inspections and diagnostic sales.
    • The retail price is pre-established by a 52% margin from napa prolink's pricing to us (they're the highest priced aftermarket vendor in our area).
    • We then call the other local vendors to ask them for there best price on product X and shop around amongst local vendors to beat it and we get dramatic price drops from online (sometimes finding the products for an additional 20-30% cheaper) so if the advisor takes the extra time to source it, he can dramatically increase his pay without becoming out of this world overpriced.

We've been doing this for the past 3 yrs and haven't burned any relationships as that's the first question I'm asked after I'm told that takes way to much time (do the #'s, 20-30% is huge).

  • Technicians get paid on hours (If the variance goes outside 10% of our estimating guide, we want to know why).

I don't know what else to really do.

CSI SCORE

  • Not really even a legitimate one, if the client is ecstatic with our service, we ask them to get online and write a review on FB and Google. 4.8 avg minimum or I get ornery.
  • Afraid of it becoming a leveraging system of clients over staff. Don't know how others have successfully approached that.

 

ARO

  • Without a minimum requirement or a push, we've always approached it with this mentality: Would you rather see 30 cars to make $3,000 or would you rather see 3? Which one would be less frustrating?

CAR COUNT

  • I've been afraid to chase this one as the immediate thought goes to "couponing" or something. Does anyone have any suggestions for this?

 

That probably sums up my KPI's because that's all I know. Any suggestions? (Please refrain from insults and negative insinuations, I'm being transparent hoping that I'm asking questions others have but are afraid to ask for fear of looking silly.)

 

 

Margins:

 

Parts profit margin and labor profit margin is good to track. Seems like you have the parts profit margin down. Ultimately a total profit margin combining parts and labor is what you want to to see to get your GROSS profit margin. Industry target standard is 60% combined.

 

For technician labor hours you want to track productivity and efficiency. Productivity is the amount of time they spend actually working during the hours they are in the building/clocked in for. For instance a person that is very diligent in an 8 hour day might spend 7.2 hours out of that work day working being productive opposed to another person only being productive 4 hours our of 8. We have to count bathroom and personal breaks but what you want is a high productivity % from your techs. Efficiency is how fast a tech can get their work done as per how much they are getting paid for the job. If you are paying salary then dividing the hours turned vs their day will produce the efficiency %. If they are flat rate then substitute their day with all the hours of their job that day. Both are good metrics to track but you will have to have your techs clock in and out of jobs to do so effectively.

 

 

CSI Score:

 

Best way to track CSI is to actually poll your customers. We don't to be transparent.

 

We do solicit for reviews regularly. It is kind of an art in the way you communicate with customers and the feeling you get from them. Due to the damage reviews can do to your online reputation you have to tread carefully. If we provided a great service and or they are a returning customer and they have not given us a review we tell them how much we appreciate their trust in us and we would be so grateful for a 5 star review so we can attract more great clients like themselves. This is why reviews arent the greatest way to get a true CSI score.

 

 

ARO:

 

A high ARO is a great way to indicate if your service advisers are selling additional needed services and if they are selling more hours. Speaking of hours, Hours per RO is another good way to track if your service advisers are doing their job well. What also coincides with ARO/HPRO is technician discovered work. If you want to have high tickets you have to have a lot of discovered work to sell. If you track what your tech's are discovering you can then calculate other metrics such as closing ratio.

 

 

Car Count:

 

Car count is a good measure of how well your marketing and CRM are performing. Of course more importantly is getting the right customers through the door however if your car count is constantly in a state of flux, that would be a good indication on focusing on your retention marketing as well as new customer marketing. We all battle with the highs and low to get it to smooth out as much as possible when it comes to car count.

CMillet86 Enthusiast

CMillet86

Posted
Posted

These are the things I struggle with immensely as a single person shop. I try to implement them all but being pulled in so many directions means I usually forget.

  • Like 1

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share
Go to topic listing

  • Available Subscriptions

    See all Subscription Plans

  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      The Technician Shortage Is Our Fault, And It's Time We Own It
      By Joe Marconi in Joe's Blog
         0 comments
      The Technician Shortage Is Our Fault, And It's Time We Own It
      Nearly every day, I hear shop owners complain: "There's a technician shortage. We can't find qualified people. There's no one out there." If that's true, then who's to blame?
      The industry? The schools? The government? I don't know how you feel, but who promised us an endless supply of qualified technicians?
      Another common complaint is that young people do not want to work in the trades. Well, if that were true, then why are other trades such as HVAC, electrical, and plumbing growing? What are they doing that the automotive industry is not? 
      Here's the reality we need to face: We do have a problem, but we shouldn't look for someone or any entity to rescue us. Not the government. Not the trade schools. Not the recruiting companies. No one owes us a workforce. If we want great people in our industry, it's up to us. At some point, we need to own up to the truth: Building a pipeline of qualified technicians is our responsibility.
      In this blog article, I will break down the key reasons we are in this situation today and what we, as an industry, can do to solve the technician shortage. Are you ready to look in the mirror?
      Have We Pushed Technicians Away?
      Let's take a look at flat-rate pay. True flat rate, which pays a technician only for the hours they produce, is a controversial pay plan that emphasizes high production levels and creates a competitive work environment that, if not properly controlled, can lead to increased mistakes and a decline in morale and team spirit. Additionally, the stress and physical demands placed on technicians as they age are not favorable to long-term employee retention. What do we do with technicians as they grow older into their fifties and begin to slow down? 
      I have heard all the arguments and pros and cons of flat-rate pay, and I am not going to judge any pay plan. Let the facts speak for themselves. True flat rate has changed in most areas around the country and has evolved into a pay plan that gives technicians some pay guarantee.
      Many shop owners have learned that team morale, along with the opportunity to earn income, is important to technicians and to the company's long-term success. But let me ask you: how many technicians have left or been pushed out over the years because of the old flat-rate pay system?
      Another issue is the workplace environment. I remember being grateful to be hired as a young technician at a local repair shop. While very thankful, the work environment was not ideal. The shop owner kept the bay doors open year-round (I am from New York) unless it rained or snowed. He felt that if the bay doors were closed, customers might think we were closed for business. We had no heat and no hot water. Many of the jobs were done outside, year-round,  in all types of weather. The starting pay was minimum wage, with no benefits, sick days, or vacation pay. 
      Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
      While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
      Many of us found over the years that the "my way or the highway" mentality was a sure way to isolate employees and make them more likely to look over the fence for greener grass. In other words, it led many technicians to seek employment elsewhere, where they felt they could be appreciated and recognized for their hard work. The issue, however, was that there wasn't much green grass around. Disappointment after disappointment, bouncing from repair to repair shop, eventually led to despair. So, I ask you: were workplace conditions a contributing factor in today's technician shortage?
      Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
      Here is the bottom line: people don't leave their job; they leave their experience. We must do a better job. 
      The News Isn't all Bad; Your Next Steps to Fix the Technician Shortage
      To fix the technician shortage, it will take a combined effort from everyone in the automotive industry, particularly automotive shop owners. Shop owners are in the perfect position to make the greatest impact, not only on their businesses but also on the future automotive workforce.
      First, shop owners must become better leaders and understand that their ultimate success is directly dependent on the people they assemble around them. Any shop owner who mistakenly believes they can build an empire solely on their abilities is destined for serious disappointment. Business owners who think like this will eventually plateau. Without the collective contributions from a team of qualified people, your business will stall; it will not continue to grow.
      Create a workplace that attracts top talent: a clean, professional, well-equipped facility designed to support productivity, teamwork, and a career, not just a job. Build a great reputation in your community by getting involved locally. Become the auto repair shop that people take notice of as "the" place to work.
      Next, shop owners must become more financially knowledgeable. Knowing your numbers and what you need to achieve for a strong bottom-line profit is essential to paying technicians the money they need and deserve. Profit will also allow you to compete with other trade industries by providing a benefits package that has real take-home value and security.
      When it comes to culture, this is where the rubber hits the road. People crave recognition, praise, and a sense of purpose. Despite what you hear, people are not just money-motivated. Once people feel secure in their financial situation, retaining and motivating technicians can only be achieved by connecting with them on an emotional level. You cannot show enough appreciation. Give out praise for a job well done as if your business depended on it, because it does.
      As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
      Our future is dependent on young people entering our industry. We need to give more young people opportunities. Every shop owner across the country should consider hiring an apprentice, then build an apprentice training plan and career path for them. If every shop did this, we could solve the technician shortage within five years. Get involved with the trade schools and high schools in your area. Look into the NAPA Apprenticeship Program. Don't sit on your hands with this one. Do it today.
      Lastly, don't get left behind. Commit to ongoing training for all your employees. Keep up to date with tools and equipment tailored to your business model. Don't try to be all things to all people and all vehicles. Identify your core profile customer and the vehicles they drive, and become an expert on those vehicles and the services you offer.

  • Similar Topics

    • nptrb
      Mid-Year Reset: What Your Auto Shop’s Numbers Are Telling You
      By nptrb

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • Joe Marconi
      What Perks to You Offer to Attract and Retain Employees?
      By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • carmcapriotto
      Stop Hiring in Panic Mode: Build a Recruiting Pipeline for Your Shop [RR 1094]
      By carmcapriotto
      Thanks to our Partners, NAPA Auto Care and NAPA TRACS Watch Full Video Episode Host Carm Capriotto welcomes Chris Lawson, founder of Technician Find, to discuss one of the biggest challenges facing independent auto repair shops today: finding and keeping great technicians.
      Chris explains why many shop owners fall into what he calls "fire alarm syndrome," waiting until a technician leaves before starting the hiring process. That reactive approach often leads to rushed decisions, poor hires, and ongoing turnover. Instead, he advocates for an "Always Be Recruiting" mindset, where shops continuously build relationships with potential candidates long before they have an opening.
      The conversation explores practical strategies for becoming a destination workplace, creating a recruiting pipeline, and building a culture that attracts top talent in a competitive market.
      What You'll Learn Why reactive hiring creates costly staffing problems How to build a bench of pre-qualified technicians before you need them Why becoming "10-mile famous" can help attract both technicians and customers How culture-focused marketing can outperform traditional help-wanted ads The three things technicians value most: respect, growth, and compensation Why sign-on bonuses often fail and how to structure them more effectively Practical ways to engage passive candidates who are not actively job hunting Resources available through Chris Lawson's free online community for shop owners
      The best time to recruit a technician is before you need one. Shops that continuously market their culture, build relationships with local talent, and maintain a pipeline of qualified candidates are better positioned to grow, avoid staffing emergencies, and create a workplace where top technicians want to stay. Recruiting is no longer an occasional task. It is an ongoing business strategy. Chris Lawson, TechnicianFind.Com Love your shop? Stay, but stay ready. Auto techs join to level up, find good shops, and keep tabs on top indie jobs nationwide. Techs only. No BS. Independent Wrench Jobs: https://www.skool.com/independentwrenchjobs Finding Technicians Part 1- Chris Lawson [RR 803]: https://remarkableresults.biz/remarkable-results-radio-podcast/e803/
      Finding Technicians Part 2 – Chris Lawson [RR 816]: https://remarkableresults.biz/remarkable-results-radio-podcast/e816/
      Technician Attraction Blueprint [RR 921]: https://remarkableresults.biz/remarkable-results-radio-podcast/e921/
      Attract, Develop, and Retain Top Automotive Talent [CC 113]: https://remarkableresults.biz/remarkable-results-radio-podcast/cc113/
      Beyond Babysitters: Developing Strong Managers and Financial Transparency [RR 1076]: https://remarkableresults.biz/remarkable-results-radio-podcast/e1076/
      Thanks to our Partners, NAPA Auto Care and NAPA TRACS
      Learn more about NAPA Auto Care and the benefits of being part of the NAPA family by visiting https://www.napaonline.com/en/auto-care
      NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/
      Connect with the Podcast:
      Visit the Website: https://remarkableresults.biz/
      Subscribe on YouTube: https://www.youtube.com/carmcapriotto
      Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/
      Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ Join Our Virtual Toastmasters Club: https://remarkableresults.biz/toastmasters Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 Join our Insider List: https://remarkableresults.biz/insider All books mentioned on our podcasts: https://remarkableresults.biz/books Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom Special episode collections: https://remarkableresults.biz/collections Buy Me a Coffee: https://www.buymeacoffee.com/carm   The Automotive Repair Podcast Network: https://automotiverepairpodcastnetwork.com/ Remarkable Results Radio Podcast with Carm Capriotto: Advancing the Aftermarket by Facilitating Wisdom Through Story Telling and Open Discussion. https://remarkableresults.biz/ Diagnosing the Aftermarket A to Z with Matt Fanslow: From Diagnostics to Metallica and Mental Health, Matt Fanslow is Lifting the Hood on Life. https://mattfanslow.captivate.fm/ Business by the Numbers with Hunt Demarest: Understand the Numbers of Your Business with CPA Hunt Demarest. https://huntdemarest.captivate.fm/ The Auto Repair Marketing Podcast with Kim and Brian Walker: Marketing Experts Brian & Kim Walker Work with Shop Owners to Take it to the Next Level. https://autorepairmarketing.captivate.fm/ The Weekly Blitz with Chris Cotton: Weekly Inspiration with Business Coach Chris Cotton from AutoFix - Auto Shop Coaching. https://chriscotton.captivate.fm/ Speak Up! Effective Communication with Craig O'Neill: Develop Interpersonal and Professional Communication Skills when Speaking to Audiences of Any Size. https://craigoneill.captivate.fm                                          Click to go to the Podcast on Remarkable Results Radio
    • Joe Marconi
      Why You, an Auto Shop Owner, Should Consider Coaching
      By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • Riccardo
      If you had to step away from your shop for 30 days tomorrow, would your business continue operating successfully without you?
      By Riccardo

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.



  • Joe Marconi

    Every shop owner tracks gross sales. But is that really the number you should be focused on?

    By Joe Marconi, in Joe Marconi's Tips and Articles,

    0 comments 1 35 views
    Joe Marconi

    Marketing Strategies To Attract and Retain Your Ideal Customers

    By Joe Marconi, in Automotive Marketing,

    1 comment 7,924 views
    nptrb

    Mid-Year Reset: What Your Auto Shop’s Numbers Are Telling You

    By nptrb, in Automotive Management,

    0 comments 9 views

  • Our Sponsors

Main Sections

More Sections

Discussion Forums

×
×
  • Create New...